Wells Company is a pesticide manufacturer. Its sales declined greatly this year due to the passage of legislation outlawing the sale of several of Wells's chemical pesticides. During the coming year. Wells will have environmentally safe and competitive replacement chemicals to replace these discontinued products. Sales in the next year are expected to greatly exceed those of any prior year. Therefore, the decline in this year's sales and profits appears to be a one-year aberration. Even so, the company president believes that a large dip in the current year's profits could cause a significant drop in the market price of Wells's stock and make it a takeover target. To avoid this possibility, he urges Tim Allen, controller, to accrue every possible revenue and to defer as many expenses as possible in making this period's year-end adjusting entries. The president says to Tim, "We need the revenues this year, and next year we can easily absorb expenses deferred from this year. We can't let our stock price be hammered down!" Tim didn't get around to recording the adjusting entries until January 17 , but he dated the entries December 31 as if they were recorded then. Tim also made every effort to comply with the president's request. Question 4 (1 point) Saved Is it ethical for the company president to ask Tim to adjust the financial statements? No, the president must protect the stockholders No, there is nothing wrong with making these adjustments since the profit is expected to increase next year No, accruals and deferrals are allowed by GAAP, so there are no ethical considerations in this instance, even if the adjustments misrepresent the currentyear income. Yes, it is unethical for the president to encourage Tim to misstate the financial statements